tnota:


10 is small. Make it 1 million Dangotes.

10 will go a long way.

emmanuelewumi:



10 will go a long way.

Yes it will. However, 10 out of more than 150 million population is still small. Let's be nice and make it 1 million.

tnota:


Okay.

I am more interested in the Nigerian market and how it will bring down the demand for FX. For example, a marketer pays dollars to Alhaji and he, in turn, gives the marketer the refined fuel. How will it bring down the FX demand? Alhaji will not be under any obligation to sell his earned FX to the CBN.

why will a marketer in Nigeria pay in dollars for item in produced in Nigeria ?the products are in Naira but priced in Dollars ....if Naira devalue the product go up ....

ahiboilandgas:
why will a marketer in Nigeria pay in dollars for item in produced in Nigeria ?the products are in Naira but priced in Dollars ....if Naira devalue the product go up ....

Good question. The next question is will Alhaji accept the Naira? I doubt it. Oil is priced in dollars and he had borrowed in dollars to finance all his equipment purchases. He has to repay all his loans which are domiciled in dollars. Accepting the Naira for products and loans priced in dollars will be a very suicidal decision.

tnota:


Good question. The next question is will Alhaji accept the Naira? I doubt it. Oil is priced in dollars and he had borrowed in dollars to finance all his equipment purchases. He has to repay all his loans which are domiciled in dollars. Accepting the Naira for products and loans priced in dollars will be a very suicidal decision.

I don't think this will be dangote's problem but the CBN.

tnota:


Good question. The next question is will Alhaji accept the Naira? I doubt it. Oil is priced in dollars and he had borrowed in dollars to finance all his equipment purchases. He has to repay all his loans which are domiciled in dollars. Accepting the Naira for products and loans priced in dollars will be a very suicidal decision.

Nigerian marketers will pay in Naira but He will make USD from exporting what Nigeria does not consume and this will be used for his USD debt repayment. Besides, Dangote Group (comprising all the businesses) borrowed the money used to build the refinery and the group makes significant fx from its other businesses.

tnota:


Okay.

I am more interested in the Nigerian market and how it will bring down the demand for FX. For example, a marketer pays dollars to Alhaji and he, in turn, gives the marketer the refined fuel. How will it bring down the FX demand? Alhaji will not be under any obligation to sell his earned FX to the CBN.

Nigeria spent around USD10bn to export refined products last year. Dangote will help Nigeria save that USD10bn. But nobody is thinking about the fact that Nigeria will also forgo close to USD10bn if it sells 650,000 bpd of oil to Dangote every year at around USD45 per barrel

Lazyyouth4u:

Nigeria spent around USD10bn to export refined products last year. Dangote will help Nigeria save that USD10bn. But nobody is thinking about the fact that Nigeria will also forgo close to USD10bn if it sells 650,000 bpd of oil to Dangote every year at around USD45 per barrel

I don't think that is a problem, Nigeria just needs to ramp up production. Is Nigeria's export quantity regulated by OPEC?

Lazyyouth4u:

Nigeria spent around USD10bn to export refined products last year. Dangote will help Nigeria save that USD10bn. But nobody is thinking about the fact that Nigeria will also forgo close to USD10bn if it sells 650,000 bpd of oil to Dangote every year at around USD45 per barrel

Hmmm... This is a good point you raised oo.
Nigeria wouldn't be able to increase capacity just like that because of OPEC quotas. Such increase will even cause a fall in prices.

Well, I think Nigeria should go ahead and ramp up production. If opec wants production cuts, those cuts should be targeted at the richer members like Saudi Arabia and UAE. Saudi Arabia has 30M people with quota of 11MBPD while Nigeria with 200M people is given quota of 1.9MBPD. The UAE with 9M people has production of 3.5MBPD. Which kain rubbish be that?

Hopefully, another war breaks out in the Middle East soon so it can affects some oil production facilities there, reducing output from the region. Let us also pray against peace in Libya, before those ones increasing production. Another problem is this Biden. He will now go and make peace with Iran, remove all sanctions, and before you know it, Iranian oil is on the market. Hopefully, the Iranians refuse to return to the nuclear deal as a sign of respect to the murdered General.

Why would you wish war on anybody? E non good na. Even wars that seem not to concern us have their indirect impact on us.

OPEC regulates your export not what you do locally with your product. I believe we can refine whatever quantity we want in our local refinery but can only export the quota given to us.

ultron12345:


Hmmm... This is a good point you raised oo.
Nigeria wouldn't be able to increase capacity just like that because of OPEC quotas. Such increase will even cause a fall in prices.

Well, I think Nigeria should go ahead and ramp up production. If opec wants production cuts, those cuts should be targeted at the richer members like Saudi Arabia and UAE. Saudi Arabia has 30M people with quota of 11MBPD while Nigeria with 200M people is given quota of 1.9MBPD. The UAE with 9M people has production of 3.5MBPD. Which kain rubbish be that?

Hopefully, another war breaks out in the Middle East soon so it can affects some oil production facilities there, reducing output from the region. Let us also pray against peace in Libya, before those ones increasing production. Another problem is this Biden. He will now go and make peace with Iran, remove all sanctions, and before you know it, Iranian oil is on the market. Hopefully, the Iranians refuse to return to the nuclear deal as a sign of respect to the murdered General.

ultron12345:


Hmmm... This is a good point you raised oo.
Nigeria wouldn't be able to increase capacity just like that because of OPEC quotas. Such increase will even cause a fall in prices.

Well, I think Nigeria should go ahead and ramp up production. If opec wants production cuts, those cuts should be targeted at the richer members like Saudi Arabia and UAE. Saudi Arabia has 30M people with quota of 11MBPD while Nigeria with 200M people is given quota of 1.9MBPD. The UAE with 9M people has production of 3.5MBPD. Which kain rubbish be that?

Hopefully, another war breaks out in the Middle East soon so it can affects some oil production facilities there, reducing output from the region. Let us also pray against peace in Libya, before those ones increasing production. Another problem is this Biden. He will now go and make peace with Iran, remove all sanctions, and before you know it, Iranian oil is on the market. Hopefully, the Iranians refuse to return to the nuclear deal as a sign of respect to the murdered General.

You are a badass realist..

ultron12345:


Hmmm... This is a good point you raised oo.
Nigeria wouldn't be able to increase capacity just like that because of OPEC quotas. Such increase will even cause a fall in prices.

Well, I think Nigeria should go ahead and ramp up production. If opec wants production cuts, those cuts should be targeted at the richer members like Saudi Arabia and UAE. Saudi Arabia has 30M people with quota of 11MBPD while Nigeria with 200M people is given quota of 1.9MBPD. The UAE with 9M people has production of 3.5MBPD. Which kain rubbish be that?

Hopefully, another war breaks out in the Middle East soon so it can affects some oil production facilities there, reducing output from the region. Let us also pray against peace in Libya, before those ones increasing production. Another problem is this Biden. He will now go and make peace with Iran, remove all sanctions, and before you know it, Iranian oil is on the market. Hopefully, the Iranians refuse to return to the nuclear deal as a sign of respect to the murdered General.

OPEC only regulates export.
Dangote’s 650k barrels is local and not counted

Olaide1295:

OPEC only regulates export.
Dangote’s 650k barrels is local and not counted

Nope. OPEC agreement actually regulates production/output. Not exports.

ultron12345:


Hmmm... This is a good point you raised oo.
Nigeria wouldn't be able to increase capacity just like that because of OPEC quotas. Such increase will even cause a fall in prices.

Well, I think Nigeria should go ahead and ramp up production. If opec wants production cuts, those cuts should be targeted at the richer members like Saudi Arabia and UAE. Saudi Arabia has 30M people with quota of 11MBPD while Nigeria with 200M people is given quota of 1.9MBPD. The UAE with 9M people has production of 3.5MBPD. Which kain rubbish be that?

Hopefully, another war breaks out in the Middle East soon so it can affects some oil production facilities there, reducing output from the region. Let us also pray against peace in Libya, before those ones increasing production. Another problem is this Biden. He will now go and make peace with Iran, remove all sanctions, and before you know it, Iranian oil is on the market. Hopefully, the Iranians refuse to return to the nuclear deal as a sign of respect to the murdered General.

This is a very stupid statement. There won't be any war in the middle east, you selfish Nigerian. OPEC is not giving the quotas based on population. If you like, don't start preaching in favour of birth control. Continue giving births indiscriminately until you hit 1billion so that OPEC will allocate 500M bpd to you. You should be happy those countries agreed to stick to their various quotas, despite the fact they can still live very well if crude crashes to below $30 pb. Can Nigeria survive if it sells at below $30, which is what you'll get when those countries decide to go against OPEC and start producing in full capacity? To an average Nigerian, the whole world is conspiring against us.

ChybuzzDD:


This is a very stupid statement. There won't be any war in the middle east, you selfish Nigerian. OPEC is not giving the quotas based on population. If you like, don't start preaching in favour of birth control. Continue giving births indiscriminately until you hit 1billion so that OPEC will allocate 500M bpd to you. You should be happy those countries agreed to stick to their various quotas, despite the fact they can still live very well if crude crashes to below $30 pb. Can Nigeria survive if it sells at below $30, which is what you'll get when those countries decide to go against OPEC and start producing in full capacity? To an average Nigerian, the whole world is conspiring against us.

I don't think it plays like that. OPEC members are also protecting their individual interests by regulating production to adjust price.

From an article I read, at rate of production the current reserves will last for about 113 years(I doubt this though) . If they rave up individually then prices go down and everyone loses, if they reduce production too much prices go up and now other countries like Canada and USA with their shale oil can now join the market as sales revenue overtakes production cost. Waoh, there is a lot of mathematics going on under d hood.

Who are these ones saying OPEC quotas are for only exports?
They are for everything oo, that's why they're called production quotas, not export quotas.

Allowing Nigeria to produce an extra 650K barrels for domestic use will affect global oil market in the same way if it were for export purposes. As 650K barrels is added here for "domestic use", the 650K barrels worth of petroleum product that Nigeria was previously importing from other countries will still be in the global market looking for buyers ( same increased supply in the market).

So the impact will be the same. Increased production for local use will reduce imports. Those products that were supposed to be imported will be pushed back into the market, increasing global supply and reducing prices.

The only way to counter such impact is if Nigeria or other non-oil producing countries experience growth in demand for oil. So that that increased demand can soak up the price distortions that'll be caused by Nigerian pushing back an extra 650K barrels of supply into global markets

ositadiima1:


I don't think that is a problem, Nigeria just needs to ramp up production. Is Nigeria's export quantity regulated by OPEC?

It’s not that easy to just ramp up and produce an additional 650k bpd. It takes years and lots of cash investments and buy-in from oil majors.

Dangote refinery is still a win for Nigeria given that the cost of a barrel of refined oil costs more than a barrel of crude. That quantity of crude would have brought in $$$ but the imported refined products expends the $$$ and more.

Lazyyouth4u:

It’s not that easy to just ramp up and produce an additional 650k bpd. It takes years and lots of cash investments and buy-in from oil majors.

According to Mr Ultron Nigeria's current quota is 1.9MBPD, but I know the days when Nigeria was producing in excess of 2.3 MBPD. I think we already have d intalled capacity to produce more.

A lot of wells are shutdown.

Just like Dangote Cement did not make the price of cement to be at par with international price, I don't see Dangote refinery improving our FX demands etc. It will just fix the issue of fuel scarcity. The man took loans in dollars at less than N200 but will need to pay at the rate of 380.Its no brainer, he will focus on repayment first before anything

shalomblue:
Just like Dangote Cement did not make the price of cement to be at par with international price, I don't see Dangote refinery improving our FX demands etc. It will just fix the issue of fuel scarcity. The man took loans in dollars at less than N200 but will need to pay at the rate of 380.Its no brainer, he will focus on repayment first before anything

Even if the refinery does not improve our FX, it will create jobs and have a multiplier effect on the economy. PAYE will be paid by workers.

Good day all with the crashed rates affecting MMFs, TBs and Fixed deposits which genuine investment product can one now put his money in that have a reasonable rate of return? Any recommendations/pointers would be highly appreciated.

DUNKA:
Good day all with the crashed rates affecting MMFs, TBs and Fixed deposits which genuine investment product can one now put his money in that have a reasonable rate of return? Any recommendations/pointers would be highly appreciated.

why don't you try and export something. that's a gold mine most people shy away from

shalomblue:
Just like Dangote Cement did not make the price of cement to be at par with international price, I don't see Dangote refinery improving our FX demands etc. It will just fix the issue of fuel scarcity. The man took loans in dollars at less than N200 but will need to pay at the rate of 380.Its no brainer, he will focus on repayment first before anything

The price of cement is actually at par with International prices.

chloride6:


The price of cement is actually at par with International prices.

How

emmanuelewumi:



How

Until the recent increase to 3k which they blamed on EndSARS and Covid..

International price of cement per 50kg was like 2k which isnt too far of from N2500.

chloride6:


Until the recent increase to 3k which they blamed on EndSARS and Covid..

International price of cement per 50kg was like 2k which isnt too far of from N2500.

I bought N3500 about 2 weeks ago

I see, looks like profits need to be in forex for an investment in forex due to instability in the country.
Unfortunately nothing can earn a decent forex in Nigeria at this time even the Eurobond is tricky now, funds withdrawal in Eurobonds can take up to six months now and upon maturity the govt. may default as seen recently with a nearby African country defaulting in it's Eurobond interest payment.

My best bet is to find a profitability business of N40 to N50 million investment with stability in the currency to invest.

emmanuelewumi:



Why should the repayment come from Nigeria? Unless if you earn forex in Nigeria or the investment will earn forex in Nigeria.

Maybe time to start investing in the real sector, Agriculture is good. You don't have to do it yourself, you can employ and train people. If you have Palm trees in your village, maybe it is time to go and find people that will convert the fruits to oil, if you have empty lands in your village maybe it is time to go plant some cash crops there.

These things could yield consistent profits with little investment. Some of us are limited by human resources but if you are not lucky u.

DUNKA:
Good day all with the crashed rates affecting MMFs, TBs and Fixed deposits which genuine investment product can one now put his money in that have a reasonable rate of return? Any recommendations/pointers would be highly appreciated.

I used piggyvest to accumulate 5m so far [piggy vet goals]. I'm thinking of using the safelock to lock 5m for 1 year, the interest is decent and paid upfront.

My only fear is what if they run out of business? lol